SynopsisInflation has eased for the second consecutive month, reducing the urgency for the Federal Reserve to increase interest rates imminently. Nevertheless, persistent inflation indicators suggest current policies may still not be stringent enough.

While traders lean towards maintaining rates at September's meeting, a potential hike is still on the table. S.

75% range, whereit has been since December. Federal Reserve policymakers are likely to feel little fresh urgency to raise interest rates in September after data on Wednesday showed inflation cooled on a year-over-year basis for a second straight month, but they may take little comfort that monetary policy is tight enough to continue the easing trend.

5% ‌in June, the Bureau ⁠of ⁠Labor Statistics reported, in line with economists' expectations. 6% in the prior month.

Underneath the hood, there were some indications of broadening inflation. A sharp drop in hotel prices - unlikely to be sustained - drove much of the month-over-month easing in core inflation, and there were more categories of core goods that saw prices increasing than in June, said Omair Sharif, the founder of Inflation Insights.

Technology prices, driven by demand for artificial intelligence, jumped. Gasoline prices fell, pushing down on overall inflation.

-Iran war simmered. The Strait of Hormuz, which accounted for a fifth of the world's oil supply shipments ⁠before the start ‌of the conflict in late February, remains largely closed.

The Fed targets 2% inflation by the 12-month change in the Personal Consumption Expenditures Price Index. S.

75% range, whereit has been since December. In the two weeks since that decision, the three dissenters at that meeting and a couple of other Fed regional bank presidents who do not have a vote this year on policy have made the case for a rate hike given still-too-high inflation.

John Williams, the influential head of the New York Fed, has said he expects inflation to continue to ease as the effects of last year's tariff increases and the Middle East war abate, allowing the central bank to keep its policy rate unchanged. Fed Chairman Kevin Warsh has ‌said little about what would move him to support a change in the policy rate.

S. economics at Fitch Ratings, wrote in a note."